The Earl of Northesk: My Lords, does the Minister concede that in its hearings on the provisional measures the ICJ stated that,

"under the present circumstances ... [this] raises very serious issues of international law"?

Furthermore, in light of the Foreign Secretary's belief that it is right that the action taken in Kosovo should,

"become the basis for an approach to future conflict",

does the noble Baroness agree that it is critical that the rules of international law on such military intervention should be spelt out more clearly than they have been so far?

Baroness Scotland of Asthal: My Lords, it is important that that should happen. However, the case brought by Slobodan Milosevic is not the only way in which that issue can be addressed. The difficulty is that he has been able to do something which is quite wrong. The international community is looking at the issue and seeks to define the basis on which it can act together in future, and that must be the most efficacious way to proceed.

Lord Lloyd of Berwick: My Lords, if the Government are so confident about the advice that they have received from the Attorney-General and his predecessor, is it possible for that to be published so that we can all benefit from it?

Baroness Scotland of Asthal: My Lords, I am sure that the noble and learned Lord will be aware from his long experience in dealing with these matters that neither the advice nor the substance of the case can at this stage be published. Obviously, once the case has been heard and dealt with matters may change.

Tharcisse Muvunyi

2.58 p.m.

Lord Rotherwick asked Her Majesty's Government:

Whether they have had approaches from the United Nations War Crimes Prosecutor for the extradition of Tharcisse Muvunyi in connection with genocide in Rwanda.

The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, it is government policy not to discuss whether extradition requests have been received in individual cases. I would, however, stress that we strongly support the work of the International Criminal Tribunal for Rwanda, established specifically to prosecute the

2 Feb 2000 : Column 235

appalling atrocities in that country in 1994. The tribunal has extensive powers to request assistance from states, and we have assisted it in the past.

Lord Rotherwick: My Lords, the House has just heard from the noble Baroness, Lady Scotland of Asthal, that the Government wish to identify any war criminals. Can the Minister say whether any investigation by the Metropolitan Police is ongoing to identify this man as a possible war criminal?

Furthermore, in the light of the Prime Minister's statement that there is no hiding place for war criminals and in so far as we are able we shall bring them to justice, what action are the Government taking to bring this alleged war criminal to justice?

Lord Bassam of Brighton: My Lords, we are fully in tune with our international obligations as regards the prosecution of war criminals.

It is unusual to comment on individual cases. However, I can advise the House and the noble Lord that I understand that the police are considering material submitted to them about allegations of torture by Lieutenant-Colonel Muvunyi.

Baroness Rawlings: My Lords, why did Her Majesty's Government allow a well-known war criminal, Lieutenant-Colonel Muvunyi--known as "the commander"--and his family to enter and live in the UK? Have they been given political asylum here until 2002, as reported?

Lord Bassam of Brighton: My Lords, I am unable to advise on individual immigration cases. That would be wholly inappropriate for reasons that I am sure the noble Baroness fully understands. I understand that that has been the practice adopted by governments for many years.

Lieutenant-Colonel Muvunyi followed his family here. That remains the case. At that stage we were not aware of allegations against Lieutenant-Colonel Muvunyi.

Lord Strathclyde: My Lords, if the Minister cannot answer that question, perhaps he can answer this one. Is this man in this country on the basis that he seeks asylum?

Lord Bassam of Brighton: My Lords, I am unable to answer that question. It would be inappropriate for me to comment on Lieutenant-Colonel Muvunyi's immigration status.

Lord Strathclyde: My Lords, from time to time we are advised of the number of asylum seekers in this country. Is the Minister saying that those people cannot be identified in any way?

Lord Bassam of Brighton: My Lords, in this instance I am unable to provide that information. I think that it would be inappropriate for me to comment on that.

Lord Merlyn-Rees: My Lords, has the UN prosecutor the power himself to apply for extradition or does it have to come from government to government?

Lord Bassam of Brighton: My Lords, we do not have an extradition treaty with Rwanda. It is for the International Criminal Tribunal to make any applications to this country.

Baroness Williams of Crosby: My Lords, will the Minister confirm that there has been no request from

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the International War Crimes Tribunal or from the war crimes tribunal for Rwanda? If there were such a request, can the Minister pledge to the House that the request would be taken seriously and considered by the Home Office in order to uphold government policy on this matter?

Lord Bassam of Brighton: My Lords, of course, we would completely fulfil our international obligations; and we would, of course, respond positively to any such request.

Lord Waddington: My Lords, what is this new doctrine: that this House cannot discuss individual immigration cases? Have there not been countless debates on the Floor of this House about individual cases?

Lord Bassam of Brighton: My Lords, I have outlined the situation. I understand that it is the same as it has always been.

Lord Rotherwick: My Lords, in the light of the escalating asylum figures, and the appalling processing figures, what steps are the Government taking to prevent war criminals entering this country as bogus asylum seekers and then living on social security?

Lord Bassam of Brighton: My Lords, we have an active immigration policy. We have an index and register at our ports. We properly vet people when they come to this country. We shall continue to do so to the best of our ability. That is the position. That was the position under the previous government. No doubt they were as successful as we hope to be in the future.

Lord Hooson: My Lords, can the Minister explain further why he states that it is inappropriate for him to answer those questions? Whether or not this man is an asylum seeker is a simple question which deserves a factual answer. The House deserves that.

Lord Bassam of Brighton: My Lords, as a matter of course and of policy we do not usually discuss and debate individual applications that may be made to our Government. That has always been the case.

Lord Campbell of Alloway: My Lords, will the Minister think just for a moment? Does he accept that if judicial proceedings involve anyone concerned with immigration, of course no mention is made of that matter in this House; but does the noble Lord accept that time and again mention is made of cases, and properly so, when they are not subject to the jurisdiction of the courts?

Lord Bassam of Brighton: My Lords, in the circumstances to which the noble Lord draws my attention, there is, admittedly, widespread debate about immigration and asylum matters. That is right and proper.

Lord Tebbit: My Lords, what advice can the Minister give about how the House may proceed to

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understand the facts underlying this case if the noble Lord continues to shelter behind the doctrine that it is none of our business?

Lord Bassam of Brighton: My Lords, these issues are, of course, important for public debate. The point I make is that it would be invidious to discuss personal circumstances of certain individuals. That must be right and proper.

National Health Service

3.6 p.m.

Baroness Cumberlege rose to call attention to the state of the National Health Service; and to move for Papers.

The noble Baroness said: My Lords, in opening the debate I should like, first, to declare an interest as an executive director of MJM Healthcare Solutions, a consultancy firm serving the National Health Service. Like so many of your Lordships, I am also connected with several charities and professional bodies associated with the service.

The Attorney-General (Lord Williams of Mostyn): My Lords, I wonder whether those noble Lords who are leaving could do so quietly so that we might give the noble Baroness the courtesy of being able to hear what she says.

Baroness Cumberlege: My Lords, I am grateful to the noble and learned Lord. It was not of great interest. However, I hope that the following will be.

I grew up in the National Health Service. My father joined it in 1948 and, since patients came to the house, in my home we literally had blood on the carpet.

I know the Minister, if not from a medical family, has had a distinguished career in the National Health Service. As the former director of the NHS Confederation he won great respect not only from a succession of Ministers but also from within the field.

He and I worked closely together in our former lives; and I believe that neither of us can take any pleasure in the current problems of the National Health Service. It is like a fond but ageing aunt who through wear and tear is beginning to disintegrate. Neither of us wishes to watch this painful demise and, more importantly, nor do the people of this country. All parties, all peoples, are willing the NHS to succeed. We are terribly proud of it, and rightly so. The ethic is superb, but the delivery is wanting--not least because, like most government-run business, it suffers from the vagaries of politicians and the intransigence of the Treasury.

In this House we can have a civilised debate in the hope that the views of your Lordships are heard by the Minister and incorporated into policy. The Minister is able to talk freely in the almost certain knowledge that

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this debate is verging on the confidential, and if our views do emerge in government policy we shall not crow about it.

In the past 20 years we have watched governments divest themselves of the management of many industries from airlines to utilities. There are now even reports that the Government want all council housing sold by 2010, and stakeholder pensions to replace SERPS.

The Government are relaxing their hold on housing and social security, yet both are as important to people's health and well-being as are doctors, nurses, medicines and equipment. Yet in sharp contrast, the Government tenaciously keep a grip on the NHS in the belief that they can manage it successfully.

As a past Minister, I know that managing the National Health Service from Westminster and Whitehall is near impossible, especially with a centralised regime, as is this one. The NHS is truly a people's service and it needs sensitivity and intimate knowledge to make it work. But the challenges today are greater than style, organisation and form. Quite simply, the people's service is failing to keep pace with the people's expectations. Long waiting times, cancelled operations, days on trolleys, round trips of hundreds of miles to find an intensive care bed are simply not acceptable to people belonging to the world's fifth largest economy. As the noble Lord, Lord Winston, has said,

"The truth is that our services are much the worst in Europe".

In his recent interview on "Breakfast with Frost", the Prime Minister said:

"I am not going to sit here and say that there aren't problems in the NHS because there are and we have got to put them right".

I am not going to stand here and say that there were no problems in the NHS when we were in government, because there were, and we tried to put them right. The difference is that now we have a Labour Government which can make changes which will always be denied to a Conservative government. What is more, this Government pride themselves on their modernising zeal, a zeal which should focus on the NHS because those who work in it and those who use it no longer believe that the NHS is sustainable in its present form. Even the BMA, with a tradition of resistance to change, is seeking better solutions. The time is right for change.

The NHS is the largest and most complex service industry in the UK. It is run by a board of directors, Ministers, who are largely amateurs--though of course I exclude the noble Lord, Lord Hunt--and they are appointed and disappointed by acts of capriciousness; hardly the best way to appoint a top management team.

We all know that in the lifetime of a parliament, when a serious crisis occurs, there is pressure to "do something", and all a government can do within the timescale is to change the organisation. So there follows a time of disruption and huge expenditure. Those involved, fearful of losing their jobs, worry about where they will fit into these new structures.

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Understandably, they concentrate on the new bureaucracy and not the proper care of patients. In the vernacular, they take their eye off the ball.

Primary care groups, which came live in April--just 10 months ago--are already having to consider changes in geographical boundaries, mergers with neighbouring groups and disbanding their boards in order to become a different animal: a primary care trust. Managers in the health service are continually having to reapply for their jobs and as a consequence they get fed up and they leave. We need good managers, we need to keep them and, of course, many of these people come from clinical backgrounds: top nurses, midwives, professions supplementary to medicine and so on.

The irony is that users of the health service are totally unconcerned with organisational structures, just as they are disinterested in the management of, say, Tesco, where they want a quality product at a price they can afford. For the money they invest in the NHS through taxation, people want skilled doctors, compassionate nurses, prompt attention and successful outcomes.

Crises occur when the delivery of service fails, when people lie on trolleys, when operations are cancelled. Changing a committee structure or reorganising management hierarchies achieves little, if not in fact a considerable retreat.

Nearly 20 years ago when I first tried to tackle waiting lists, I found that people had waited seven years for a hip replacement. For those still alive, we packed them off to a private hospital paid for by the NHS. They were delighted to have been treated. They may have been surprised at being sent to a private hospital, but people in pain, people in fear of their lives, really do not care about committee structures or the political ideology of the system. They want to be treated.

As the Minister will remember, the greatest incentive I had when chairman of the South West Thames region was to overtake the Mersey region in the league tables. I was continually telling my people, "We have got to beat Mersey"--beat it on the shortest waiting times, the best run hospitals, the best clinical practice and the most comprehensive community services. Competition was a spur to ratchet up standards.

I would never claim that any region or any government can avoid every crisis in the NHS, but I believe that even the Minister will agree that this winter has been exceptionally bad. It is not acceptable that a bout of flu should cause such misery and havoc.

To meet the crises it is essential to have all options open. The NHS ought not to exclude as a matter of principle the private sector. It is inconsistent to do so when so much of the NHS is already privatised: private finance initiatives to build hospitals; the supply of medicines and equipment; contracted laundry and catering services and path labs are all examples. Competition is both a spur and a discipline. The Prime Minister has offered us the prospect of considerably more spending. We now know that it is subject to

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sorting out some questionable maths and the small Brown print, but it is even more important that financial discipline should be maintained when new money is provided. But I really do believe that money alone is not sufficient.

What is lacking in the NHS is that the vast majority of the staff has no feeling of enfranchisement and no ownership. The deluge of new initiatives that spin their way from No. 10, and occasionally from No. 79, removes the incentive to experiment and to use personal inventiveness. It is remarkable that both this Government and the last planned to put the budget into the hands of GPs, who defend their position as "independent contractors". They feel ownership of general practice; though the least controllable, they are the most trusted. That should teach us something.

In the two reports in which I have been heavily involved, one on maternity services and the other on community nursing, the thrust was to give people power--mothers to choose how their babies are to be born, people to choose whether to see a doctor or a nurse; and at the same time to enfranchise midwives and community nurses to enable them to prescribe and to take responsibility. Where this happens--and I have witnessed it--recruiting and retaining staff is not a problem. Indeed, where caseload midwifery is introduced there is a waiting list--a waiting list for midwives to work in those units.

The pull in such a politicised service is always towards the centre, to Whitehall. Yet most politicians have only a scant knowledge of how healthcare is delivered to people. They only know about organisations. We are all trapped in a marvellously pure ideology, the ideal socialist dream. We all have to have dreams, but this one does not work. It does not work because it is isolated in a brutally competitive world which generates the money for unreal dreams.

Pure socialism in health works, or does not work, when it is set in a socialist world with a population which embraces it; every man or woman according to their needs, sharing and caring for each other. But I must admit that I am ashamed to say that this ideal has been overwhelmed by litigation; self interest has overcome the common good. It may be disappointing, but even new Labour has buried the socialist ideal.

So we have to devise a system which reflects today's ethic, the will of the people rather than their dreams. The awful realisation that the NHS may not be the best health service in the world is dawning. This is infinitely sad and it must be put right.

With elections looming, and the knowledge that changes take time, what is acceptable and what is not requires political reality, but there is always an opportunity for innovation, experiments, pilot schemes and evolution rather than revolution. Some might advocate putting a hospital or two under private management if only to prove that the Government can do it better. Again, a precedent was set in a totally different service: the prisons. If that is a bridge too far, we could try running one or more trusts as co-operatives with staff owning all the shares. We have to make staff feel real ownership in what they do; that

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they are both appreciated and rewarded for personal success as well as the success of their trust, primary care group or health authority.

We have to be humble enough to accept that time and again governments are proved to be poor managers and that other countries happily mix private and public healthcare to provide a better service, if not a better ethic. There is no need for a big-bang change. We can be broad minded, try and then pick the winners. What is so sad is that this Government ring-fence cash to ensure that their will is done. Central control produces mindless freaks and the arrogance of government in believing that they know the priorities of Truro and Barnsley, Medway and Mersey is facile.

We now have to restore the confidence of the British people in their National Health Service. I now believe that with their ISA, with the coming stakeholder pensions, people have got beyond believing that only through allocations from general taxation will we achieve an NHS of which to be proud. People are losing ownership of the NHS. It belongs, as the Minister will have discerned, to the Treasury. It is the Treasury which, scrabbling around in the till, decides who should be happy and who should not.

I would suggest that we should all pay, each according to his means, an NHS insurance premium, with everybody paying something so that all are enfranchised. The NHS will then compete against all comers. It should, like so many industries, have a regulator or an inspector, as we have for schools, enforcing standards, insisting on efficiency, dedicated to quality, owned by the people and at arm's length from politicians. The Commission for Health Improvement goes a little way towards meeting that requirement.

The NHS premium payment would be set, like the BBC licence fee, with some political involvement. Everyone with insufficient income would have their premium topped up from general taxation. Of course this is called "means testing", but then general taxation, which now pays for the NHS, is means tested. We should not be fearful. It would be an insurance payment which everyone understood.

Income tax could fall, allowances could be made for those with private insurance and private expertise could be used. It may cause a furore among old Labour, but who wants old Labour? Certainly not new Labour. We now know that creating more and more Ministers in England and, as we heard today, doubling the number of political advisers, have failed to get patients off trolleys. We should wrestle the management of the NHS away from the politicians. I believe that with my new funding arrangements that would be largely possible.

I am not advocating privatising the NHS. An undiluted private health insurance scheme is not the answer. With current schemes, so much seems to be excluded. And just when the need is greatest the premiums become unaffordable. But, strangely, even when patients from private hospital care are admitted to NHS hospitals because things have gone wrong there

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are very few publicly expressed complaints. This is because people pay for something specific; they have ownership and loyalty. That is what people are trying to feel for the NHS, but it is ebbing away. I do not blame this Government entirely--it is largely the passage of time and changes in attitudes.

The NHS and the people are wise enough and experienced enough to be weaned from the wet nurse state onto something more modern and solid. This Government are the government who can achieve it if they have the foresight, the wisdom and, above all, the courage. My Lords, I beg to move for Papers.

3.24 p.m.

Lord MacKenzie of Culkein: My Lords, I welcome the debate introduced by the noble Baroness, Lady Cumberlege, who has a long record of involvement in the National Health Service. Her report on community nursing, to which she referred, was one of the few published during the past 17 years to which I could fully subscribe.

One of my failings is that I sometimes indulge in mixed metaphors. When thinking about this debate, I was conjuring up a picture of the possibility of a fox in the NHS chicken coop--a Dr Fox--together with a concept of a Trojan Horse. Perhaps a mixed metaphor too far. But, then, perhaps not!

I am not a conspiracy theorist, but one does not have to be when one looks at the juxtaposition of two recent events. The first was Dr Liam Fox's description of a patient's guarantee. It sounds like good medicine, except that it turns out not to be what is on the label. Neither is it a placebo. Instead, Dr Fox said that it was "perhaps a Trojan Horse".

Secondly, we had the talking up of the difficulties arising from the influenza epidemic as a crisis, aided by parts of the media which were clearly intent on finding a crisis, whether real or imagined, with a view to dropping a match into the NHS petrol tank.

It would be foolish to suggest that there are no difficulties facing the NHS. Equally, it would not be sensible for the party opposite to suggest, as is suggested in another place, that they are the making of the present Government. For example, one cannot blame this Government for the reduction in nurses in training or in practice. We know that it takes three years to train a nurse--and more when one takes into account the time waiting to enter university and eventually becoming a proficient clinical practitioner. Many hospitals could open wards today, but there is a dearth of nursing staff.

In the mid-1980s there were in England some 3,988 whole-time equivalent nursing and midwifery staff. In 1997, the figure was 3,500 whole-time equivalents. I greatly value the essential contribution made by skilled managers and administrative staff to the health service, but let us look at the staffing figures. The 1987 figure for England was just under 114,000 whole-time equivalent administrative staff. By 1997, it was more than 153,000.

One can perhaps draw one's own conclusion about the priorities of the previous government. Were they clinical priorities, or were they the priorities of

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competition between hospitals in the internal market, which, happily, this Government have ended? And why else could it be that in the past few weeks managers and clinicians struggled to find beds, whether in ordinary wards or in critical care units, for patients with complications arising from the flu epidemic? Could it be because the number of hospital beds was reduced by one-third between 1979 and 1997?

Of course there must be continuing review, rationalisation and change in the health service. Medicine, surgery and psychiatry are all changing. But I venture to suggest that the bed cuts can go too far. I well remember being lectured by a Minister of Health in the previous government about the virtues of the Tomlinson Report on London hospitals. Events have, of course, proved him wrong. The Tomlinson Report was an object lesson in ensuring that co-operation between the health service, universities and other training institutions should be just that--co-operation. Care must be taken to ensure that the tail of the providers of education does not wag the National Health Service dog.

I welcome the fact that the Government have set up an inquiry under Sir Clive Smee into the provision of hospital beds. I look forward to his report and I hope that Sir Clive will also take account of the issues of future bed cuts which might arise from the PFI hospital building programme. We cannot continue to base future bed number assumptions on ever-faster patient throughput and on more and more day surgery. Too often, fast throughput leads to the revolving door. Beds are not always freed up and that can lead to great distress to patient and family.

I welcome the abolition of the internal market and the introduction of a new system of co-operation. I welcome the end of queue jumping by GP fundholding practices. As a nurse, I reject anything other than clinical need as a basis for priority.

NHS Direct proved itself during the recent flu epidemic. Even many detractors in the medical profession, who perhaps fear nurse-led initiatives, have come on board. Nurse-led, walk-in centres and the creation of nurse consultants are long overdue initiatives, but no less welcome for that. I look forward to their development.

Needless to say, I welcome the Prime Minister's statement about bringing spending up to the EU average. Yes, it will take time. There needs to be change so that the NHS becomes more user-friendly. There is, indeed, much more to be done. But I reject the real agenda of those who talk up crisis after crisis. I return to the Shadow Minister, Dr Fox, who spoke to a fringe meeting at the Conservative Party conference last October. He said:

"I think what we are proposing will revolutionise private health insurance in the way we revolutionised pensions in the 1980s".

Even those with short memories will remember some of the negative fall-out from that particular revolution.

I accept what the noble Baroness, Lady Cumberlege, said regarding the average patient not being concerned about structures. However, I believe that the population is concerned about the philosophy

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of funding the National Health Service. I do not believe that the Trojan Horse strategy will fool the public, despite the Shadow Minister's apparent assertion that they, the public, have not thought through the implications of the Conservative agenda.

I believe that the party opposite wants the National Health Service to deal with the expensive and the uninsurable. It hopes that its Trojan Horse will lead to privatisation, with patients paying for insurance and health charges, and no doubt for all minor surgery. I think not, my Lords. It would be much more sensible to recognise that the rhetoric of crisis, which has bedevilled every debate about health funding in this country, is as deeply harmful as it is destabilising.

Of course public and professional expectations will always be ratcheted upwards. Medical and pharmaceutical breakthroughs will always follow those expectations upwards. Better than rhetoric, which is great fun, is serious debate which acknowledges that this Government have made a respectable funding increase for the National Health Service and are tackling difficult issues. I hope that with serious debate we can concentrate on many difficult issues, such as priorities in tertiary care. If we do not do that, we shall be back in a crisis again, and next time it might be a real crisis.

3.32 p.m.

Earl Howe: My Lords, part of the difficulty with the Motion we are addressing is that the current state of the National Health Service is, to some extent at least, a matter of perception. Some parts of the NHS are of world-class standing; others, to put it at its mildest, fall decidedly short of that. However, if we wish to find a measure of the NHS's performance that depends more on fact than on subjective judgment surely we could do worse than examine the comparative data on health outcomes across Europe and the developed world.

In the year 2000, Britain--the world's fifth largest economy--has one of the worst records in Europe of deaths from coronary heart disease. Long-term cancer survival rates in this country are way below those of Germany or the United States. On their own, the prevalence of those two causes of death should prompt us to ask ourselves some searching questions about the kind of service which the NHS is now delivering and what can be done to improve it.

In highlighting those issues, I seek to make only one non-party political point: that there is a widely held view that, despite the commitment and expertise of those who work for it, the NHS is failing us. That view is reinforced by the intense pressures experienced by hospital upon hospital during the recent winter flu crisis. Those pressures were entirely predictable and, only a few years ago, would have been absorbed with relative ease. We read, too, of,

"people spending hours on trolleys waiting for admission, patients being discharged more quickly than is safe, and surgical beds being filled with medical emergencies, leading to even longer waiting lists"--

not my words, but those of Professor Sir George Alberti, President of the Royal College of Physicians and a friend of this Government.

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When the noble Lord, Lord Winston, speaks, as he will today, it is right that we should sit up and listen to him. I do not seek to misrepresent the noble Lord in any way and I hope that I do not. However, if there was one emotional thread that seemed to run through his recent comments about the NHS (even though he later qualified those comments) it was, I venture to say, a mixture of sadness and frustration and the feeling that the NHS which we know today is, as he put it, a "gradually deteriorating service".

As the noble Lord observed, the Government's usual reaction when confronted by a less than flattering commentary on the NHS is to blame it all on the previous administration. It has not escaped my notice--I say this to the noble Lord, Lord MacKenzie--that the Conservatives fought and lost the last election. However, the commitment of the last administration to the NHS should no more be doubted than that of the present Government. Between 1979 and 1997 NHS spending increased by 74 per cent in real terms. That period saw capital investment go up by 66 per cent in real terms, including the largest sustained building programme in the history of the NHS. Nurses' pay went up by 67 per cent and nurse numbers by 55,000. By the end of the Conservative Government there were 23,000 more doctors and dentists than there had been at the beginning. That is no mean record.

The record of the present Government will, of course, be apparent only at the end of their term of office. They have promised substantial additional sums for the NHS and those are most welcome, even if the Government's manner of presenting their figures owes something to the art of spin. Yet, all the time, spin or no spin, the demands that are being placed on the service are outstripping its capacity to deliver.

If this country comes out badly on output comparisons, the same is no less true of inputs. The UK has the second lowest number of doctors per head of any country in Europe. Germany has twice as many as we do; Italy three times as many. Despite our poor performance in cancer survival rates, the amount we spend per head on chemotherapy is a third of what is spent in France. It is only 6 per cent of the per capita spend in America. Those are not short-term deficiencies in the NHS; they are systemic.

The Government have already made substantial changes to the health service. The Minister reminded us of some of them last week. I suggest that the jury is still out on most of them; notably, NICE, primary care groups and NHS Direct. But with the best will in the world, none of those, however much they may come to prove themselves, can do more than scratch the surface of the larger issues to which I have referred.

If there is one area where I fear that the Government's reforms have done real damage, it is in our specialist referral centres. Before the reforms, a doctor could refer a patient to a specialist in another part of the country if he believed that that was clinically appropriate. Yes, there was some bureaucracy involved to ensure that the money

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followed the patient. However, the freedom to refer was there. Now the money does not follow the patient. As a result, the system acts as a deterrent to out-of-area tertiary referrals. My fear is that some of our centres of excellence will simply wither on the vine and that, simultaneously, patients who need a higher degree of expert care will not get it. That is a heavy price to pay for getting rid of some paperwork.

The Government have, of course, recognised cancer as a priority issue. However, nothing we have seen or heard from them will remotely address the gap that needs to be bridged. Professor Karol Sikora, our leading expert in cancer, has described the Government's so-called "cancer pledge" as window dressing. If we are to improve our record in combating cancer we need several hundred more specialists, much more equipment and more chemotherapy. That is the investment which the Government must make if they are serious about cancer.

If it is true that the problems of the NHS are systemic, the issue comes down to resources; not a small amount of money, but very substantial sums indeed. That is what the Prime Minister recognised when he spoke on television a few days ago. He spoke of our reaching the EU average in healthcare spending within five years. That sounded at first like a bold new promise but a couple of days later it bore all the hallmarks of policy-making on the hoof. The Prime Minister now says that his words were not a promise but that he is confident that the target can be achieved. That is pie in the sky. There is not a respectable economist around who thinks it remotely realistic, let alone sustainable in terms of the effect on the wider economy.

The trouble with the Government's position is that they are inflexibly set on the idea that healthcare should, wherever possible, be delivered by a monopolistic state provider. Nobody in the country, no political party, wants to do other than support and improve the NHS. But only the Labour Party has set its face against promoting a mixed economy of state and private health provision. In this it is out of step with every other developed country in the world. It is the extent of private, more than public, spending that differentiates the British health system from those of France, Germany, Holland and Denmark. I believe that, sooner or later, we shall need to encourage many more people to provide for some part of their own healthcare and in so doing relieve the burden on the NHS.

If in pursuing their health policy the Government are intent on remaining a one-club golfer, they must show why they are choosing to ignore the alternatives. All sides agree that total capacity in healthcare provision needs to expand. The question to the Government is: how will they bring that about?

3.41 p.m.

Lord Clement-Jones: My Lords, first, I thank the noble Baroness, Lady Cumberlege, for initiating this important debate. I apologise to both the noble Baroness and the Minister for the fact that a

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longstanding engagement means that I shall not be able to be here to wind up on behalf of these Benches. I am extremely grateful to my noble friend Lady Thomas of Walliswood for stepping into the breach with such enthusiasm.

The state of the NHS is by far the biggest issue for the general public, as recent opinion polls show. Delivery on the NHS will be crucial to the Government's election chances. The key question will be whether they have delivered on the promise made before the last general election to save the NHS.

Several of the reforms the Government have made since the general election have been welcomed on these Benches: NHS Direct, the setting up of primary care groups and trusts; the much greater emphasis placed on clinical governance; the setting up of CHI, the Commission for Health Improvement; the acceptance that evidence-based medicine must lie at the heart of the management of the NHS; and the institution of NICE, the National Institute for Clinical Excellence. But why is the Secretary of State hiding behind it by giving it "affordability" as one of its criteria for approval of drugs and new treatments?

We also welcome the rolling out of national service frameworks. Until the flu crisis, the Government convinced themselves that some of the longstanding problems of the NHS, bequeathed by the previous government, were being tackled. But once again, during that crisis, we had the sight of patients waiting on trolleys for hours while a bed was found. Even then the Government thought that declaring an epidemic early, before the 400 cases per 100,000 figure was reached, would give them a cast-iron alibi.

After the recent crisis, it is clear that the Government miscalculated massively. By sticking to the spending plans of the previous government in their first two years yet making exaggerated claims about the amount of money they are spending now, they have raised public expectations. There is little they can now do to meet such expectations in the next 18 months or so before the next general election.

It is clear that there are huge problems. There is a lack of beds, particularly for intensive care. Doctors and managers warned of impending problems before Christmas. According to the NHS Confederation, most trusts are operating at 95 per cent capacity which makes it impossible to run an adequate system. Year on year, so-called "efficiency savings" have cut into the essential capacity of the NHS.

Where is the national beds inquiry report? Is it simply that the conclusions are too embarrassing to publish? Where is the corroboration of those 100 extra intensive care beds which the Government claim to have provided this year? The problem is exacerbated by the lack of resources for older people to transfer from acute hospitals to nursing and residential homes.

There is a massive shortage of nurses--17,000 against 8,000 when the Government came into office--and midwives. The consequence has been a disgraceful further rise in expenditure on agency nurses from £264 million in 1998-99 to £344 million in 1999-2000.

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Despite the new deal for junior doctors, their hours are spiralling out of control with one-third working more than the nationally agreed limits.

As regards health trusts and authorities, their combined deficit this year will be at least £400 million. Worse is to come in the next financial year. Yet the first instinct of the Secretary of State and the chief executive of the NHS was to shoot the messenger, not to respond to the problem. Their behaviour is similar to that of No. 10.

Postcode rationing exists for essential treatments such as the chemotherapy drugs Taxol and Taxotere; Aricept for Alzheimer's; Beta interferon for multiple sclerosis; and Clozapine for schizophrenia. Those are all well-accepted cases of postcode prescribing. As mentioned by the noble Earl, Lord Howe, outcomes in the key areas of cancer and cardiac illness compare extremely unfavourably with almost every other European country. Cancer survival rates, for example, are worse than those in Poland. As also mentioned by the noble Earl, there is an extremely poor ratio of doctors to patients, worse than in almost all OECD countries. Finally in this category of failure, we come to the issue of mixed-sex wards, which we debated a few days ago. The Government have failed to meet their pre-election pledge to phase them out by the end of 1999.

Many such problems clearly have their roots in a lack of resources. The key question that now needs to be answered is: what is the Government's commitment of NHS spending and where do they propose to raise the money? They also need to answer the question of why they are persisting with their tax cut this April of 1p in the pound rather than spending the £2 billion or so raised on the NHS as the public clearly want them to do. What precisely is the Government's pledge as expressed by the Prime Minister? Will the Minister make that clear? Is it to reach the European average ratio of health spending to GDP within five years? Is it to raise real spending on health each year for the next five years by 5 per cent in real terms? Indeed, is it an aspiration, a commitment, or both? They may have a 10-year plan, but there is little comfort for those who wish to see early improvements in the health service.

The Government are clearly in a spin, in more ways than one. This is a millennium wheel of their own construction. Let us have some hard commitments. The one fact I am clear about concerning the events of the past fortnight is that those with an interest in the future of the health service have the noble Lord, Lord Winston, to thank for extracting what pledges are now on the table.

Increased expenditure on private insurance, as the Conservative Party seems to believe, is not the answer. I am perfectly happy with a mixed economy in health. Indeed, use of spare capacity in the independent sector makes sense. But I believe that the NHS should be a comprehensive service, free at the point of delivery and we should not be incentivising patients to obtain their treatment outside the health service.

Unlike the Conservative Party I have confidence in the future of the NHS and the willingness of the British people to pay for it. Set by the side of their so-called

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tax guarantee, which assured us of an ever-falling rate of tax, how can that amount to a commitment to the NHS?

These are the problems of today with which the Government have failed to deal. They have also not yet come to grips with the problems of tomorrow. I refer, in particular, to the issue of long-term care for the elderly. Despite the elapsing of many months since the Royal Commission report on long-term care for the elderly, we have still not had a proper government response.

In conclusion, this Government have a long way to go before they stand a chance of convincing us that the NHS is on the path to recovery.

3.50 p.m.

Lord Walton of Detchant: My Lords, it is almost 55 years since I graduated in medicine. Since 1948 I have been a fervent supporter of the National Health Service in which I worked for much of my professional life, first as a consultant and subsequently as a clinical academic. Then, some eight years ago, I received a letter from the Oxford Health Authority telling me that now I have reached a certain age I can visit the hospital for social reasons but cannot use the clinical facilities. However, I have kept in touch with the NHS since that time.

Since I began to work in the NHS I and many other professionals have repeatedly pointed out that the percentage of gross domestic product spent by this country on health has been totally inadequate: 5.8 per cent now from public funds, plus 1.1 per cent from private sources. Only 8 per cent of the costs of the NHS come from the National Insurance Fund because of the demands of social security.

I must say that I do not believe that the private sector is a threat to the NHS; it is a valuable partner and generates NHS funds by the use of private beds in hospital. I had hoped that new Labour would have discarded outworn, left-wing ideology and kept tax relief on private insurance, but that is another matter.

My profession has repeatedly been accused of scaremongering, of shroud waving and of making dire predictions about the terminal decline of the NHS, which have been subsequently unfulfilled. But I am convinced that grave concern is fully justified. Morale is at a critically low ebb. I become weary of saying, as the noble Earl, Lord Howe, made clear, that we have far too few doctors and nurses in this country in comparison with many of our overseas competitors.

General practice in this country has improved out of all recognition. Of course, we are all deeply disturbed and appalled by the recent frightful events in Hyde. If the General Medical Council had previously possessed the powers it now has I believe that that frightful situation may have been averted. But general practice has improved enormously in the UK. However, we have only half to two-thirds the number of GPs per unit of population compared with France and Germany. Doctors are stretched to such an extent that, as a rule, they are only able to allocate five to seven

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minutes for a consultation. Is it surprising, therefore, that 40 per cent of the population have now turned to alternative and complementary medicine. Apart from the value and benefits derived from such measures, they are buying time in the consultation process.

Already there is a major decline in the number of young GP registrars entering the service. We are now seeing for the first time in the past two years a decline in the number of young people applying for entrance to medical school. Last week the BMA News Review published the results of a questionnaire exercise which showed that 62 per cent of those doctors consulted now believe that we no longer have the best health service in the world, but one of the worst in Europe. No fewer than 83 per cent felt that a comprehensive medical service free at the point of delivery, with present levels of funding or even with modest increases, would, in the future, be impossible.

The position in the hospitals is no better. In many respects it is worse. As we heard, beds have been closed; intensive care beds are not available when needed. Even in the small community in which I now live in Burford in the Cotswolds, to save funds the Burford Community Hospital--a major outlet from the acute wards of the John Radcliffe--has been closed and at the moment I am involved in a massive fund-raising campaign to try at least to keep the day hospital open through private funding.

Those are some of the critical issues. There are not enough beds and not enough doctors; and 12,000 nurses leave the NHS every year. Indeed, there is a problem in relation to all hospital specialities. Report after report from the Royal Colleges demonstrated, as the noble Earl, Lord Howe, said, that we have one-quarter to one-half the number of specialists in all specialties that many other developed countries have. I speak of cardiology and oncology. It is not surprising that our cancer survival rates are much lower than in many other countries. In my speciality of neurology, to quote one example, there are fewer than 300 neurologists in the UK compared with 400 in Finland, which has a population of only 4 million.

That is something which must be corrected. Many of those in the hospital service are grossly overloaded. In academic medicine the position is parlous. So many of those in lectureships, readerships and chairs in clinical specialities are being required to carry such a heavy clinical load that the time available for their major responsibilities of teaching and research is limited and seriously eroded. There are now 67 vacant clinical chairs in the UK for lack of suitable applicants and, sadly, there is a flood of early retirements by consultants in the NHS.

We are faced with an ageing population; massive technical advance; and, as others have said, the development of new and effective but expensive drugs. As the recent publication of the ABPI Hitting the Target has shown, the British pharmaceutical industry is making outstanding contributions. But there is also another massive spectre looming on the horizon. That is the genetic revolution. Gene therapy and prevention by the identification of genetic susceptibility is going to generate huge public expectation.

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What can we do? The Government's pledge to give an additional 5 per cent year on year to the NHS is welcome but will not be enough. I find the idea of charges being imposed at the moment of sickness or need unattractive. I have argued for years that the principle of hypothecated taxation, despite its disadvantages, by means of an income-related, index-linked health tax is one major issue that must be thought through. It is time to listen. Will this Government have the courage, unlike many previous administrations, to recognise that the situation is now critical? Although many of us here believe passionately in the future of the NHS, the time for an urgent and radical review of funding of the National Health Service must now be upon us.

3.57 p.m.

Lord Biffen: My Lords, I should like to record my appreciation to my noble friend Lady Cumberlege for the choice of this topic and for the manner in which she introduced it. We must learn that there are great political issues that can be pursued without recourse to adversarial politics. The speech of the noble Lord, Lord Walton of Detchant, is an indication of how one can address the portentous developments with political challenge, but none-the-less in a way which deserts the arid field of Labour-Tory acrimony.

I want therefore as my modest contribution to consensus to suggest that we could well employ the resources of the Health Select Committee of another place to consider the problem that we are now discussing with a view to seeing to what extent a broader agreement can be canvassed than has been the experience of the past few weeks. I shall try to assist in that self-appointed task by suggesting four areas for consideration. I know that others will have much wider and indeed more profound matters for consideration.

First, I should like some idea of the likely future demands that will be placed upon national health. That goes beyond the health service, though it is central to the challenge. Of course, we are all well aware of the demographic factors that have dominated recent developments and which I believe will continue. We know that the developments in medical technology and in pharmacy have added to health costs. This afternoon we have added the spectre of gene therapy. All of that necessitates that we have some idea of the parameters of the challenge, the challenge in health terms, the challenge in financial terms and ultimately the challenge in political terms that attends us.

Secondly, I should like a little refinement of figures that have been thrown into the debate in the most careless fashion over the recent weeks, which is the costs of the health service in France and Germany. The sums that are impressed suggest that the most enormous increases are required for our own health provision. That may be so, but I should like a little more detail about this. I should like a little more argument and details and rather less in headlines. I should like to know whether compulsory private insurance is, in fact, a more expensive way of delivering healthcare than the system we have

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operated in this country, because the answer to that question is crucial in determining some of the arithmetical challenges that await us.

Thirdly, I should like to say that I have an interest to declare. I am a trustee of the London Clinic. I must say that most of my thinking on health inevitably must be the health of the community in which I have been brought up. I wish to say that, without going into a great theological argument about these matters, I do feel that the provisions for healthcare are limited by the relatively modest contribution that is made to it by the private health sector. I believe that that could be reasonably expanded without undermining the basic ethos of the National Health Service. The point was made forcefully by my honourable friend, Lord Howe, and I was delighted to see that it was reinforced by the noble Lord, Lord Walton of Detchant. We simply cannot afford to neglect something from the private sector which may be contributive to overall national health any more than--and nobody today has suggested it so far--we should scrap prescription charges because, certainly in the very early days, they are thought to be antipathetic to the philosophy of the health service.

I now go to my fourth point. However one considers these matters--and to some extent I am anticipating what may be the judgment of the departmental Select Committee--I believe that we are going to have to spend more on the health service, financed out of taxation. Therefore, we have the prospect of increased spending and increased taxation. I say that because, quite frankly, I think there is an anxiety to avoid that central question, to believe that somehow administration or some other technique will excuse one from this disagreeable choice. It is the more disagreeable because it is going to have to be our choice, a choice of a British Parliament answering to a British public. It cannot be willed off to anyone else. In my view, it stands central and ahead of any other consideration one might have about convergence and all the other modish terms which are now prayed in aid, because taxation is at the very heart of political judgment and that judgment itself reflects what kind of people we think we are and for which we will make collective decisions and collective sacrifices.

I have, more or less, said what I wished to say. I should like the prospective Select Committee to be encouraged in the whole philosophy of trying to disavow that there is something for nothing in this world. I regret to say that the area of welfare has often been disfigured by the arguments of "something for nothing". Take the example of National Insurance--and I say this with deference to the Liberal Benches. In 1911, Lloyd George devised the term "nine pence for four pence". This referred to the fiddling around with the contributions of the government and the employers. The riposte of the public to this was "nine pence for nothing". That is the course of unreal economics in these matters.

I quote from a another--preferred--Welshman, Aneurin Bevan. He said that the language of priorities is the religion of socialism. That remark is provocative in the presence of New Labour. But I will say that the

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judgment of priority and the difficulties of priority lie at the heart of trying to redesign the factors I have mentioned. I wish this Government and any other government warm support across the floor of this Chamber in trying to devise something that will be measurably better than we have now.

4.4 p.m.

Lord Desai: My Lords, it is a pleasure to follow the noble Lord, Lord Biffen, who has, like the noble Baroness, Lady Cumberlege, set a standard in discussing this issue in a non-partisan manner because we are all interested in seeing a better National Health Service.

I was briefly involved, for no more than 40 winks, when I used to stand opposite the noble Baroness when I was a shadow Minister for Health. Luckily for both of us, it did not last very long. I remember the noble Baroness's commitment to the National Health Service, which she has shown again today.

I think that we ought to have an all-party pact with regard to the National Health Service because the numbers being bandied about are very confusing. Every government claim that they increase funding to the National Health Service by so much, but of course the proportion of GDP spent on it has not budged for a very long time. Is a proportion of GDP a good measure? Our criticism of state-owned enterprises was normally that they had excess capacity and overmanning. The National Health Service is the exact opposite. It has no excess capacity. It is short of staff. From one point of view, we ought to separate out certain shortages and certain improvements, but we ought also to consider the fact that, overall, no other country has as efficient a health service. That is worth saying. Of course, a lot of people are working very hard in it.

Perhaps I may say this about health outcomes: there are headlines about cancer and about coronary matters, but what about the other outcomes measures, such as life expectancy? I do not think they are going to show that badly in comparison. We need better outcomes measures and better measures of quality of healthcare, and not just those relating to certain headline causes of mortality. Let us not measure only inputs. Let us also find out how the inputs are deployed. Let us have better measures of output because we do not have them now.

I have lived here for the past 35 years and I have never seen a headline saying, "NHS in good health; nurses happy; doctors say NHS will flourish". I have only seen headlines such as, "Nurses' morale has never been lower". This goes on. I should love to see the graph of nurses' morale to see how it goes down all the time. We properly love the NHS, but our crisis-mongering is the only way we can love it. We cannot love it happily. We can only love it with conflict.

There are two important points to emphasise. One which has not yet been discussed is that while we affirm the principle of healthcare being free at the point of use--and I want to re-affirm that--we think only of

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the financial cost and not of the real cost to patients. We have allocated healthcare by time, by queuing, and by inconvenience. People often do not go to their general practitioner because it is too time consuming. This is what happens when people talk about "postcode treatment". We have also rationed healthcare by non-visible measures of cost, non-financial measures of cost. That is why certain sorts of social difference persist.

We need to move away from money sums and input numbers. We need to ask about access to quality health services and what price people are paying--and, indeed, in what terms they are paying the price--when they have free access to healthcare. If we are to improve our service while keeping it free at the point of use, we shall have to consider such questions.

Another major question is also one which has not yet been discussed; namely, the rationing of healthcare. We cannot be in denial about this. Of course healthcare is rationed, but it is rationed by the producers of healthcare, not by governments. Historically in every country, we have--quite rightly--allowed the medical profession to ration healthcare. Therefore, there are gatekeepers who will decide who gets what. For various reasons, the time has now come for this producer-domination of a major service to be questioned. Consumers want not only more information; they also want more say. So we ought to have a debate, like the debate in the state of Oregon, about what problems people think require priority treatment. For example, how would people prioritise hip operations versus some other problems? There are also acute and elective problems, but we should let people say, "We think that these treatments are top priority which should be supplied at all times, anywhere".

There are other areas where waiting is not a problem: or at certain times it is a problem but, at others, it is not. We should not say that the NHS should be free at the point of use and completely non-rationed, and then be surprised when we have problems. As I said, we ought to have a major debate on rationing. We must admit that there is rationing now. Such an admission is not in any sense a criticism of the National Health Service. Indeed, very few things that are provided free of charge in financial terms are free from rationing. It is just not possible.

Finally, I turn to a somewhat contentious problem. It has classically been known in economics that medical care is a very peculiar product because consumers do not know what they want: the producer tells them what they need. Therefore, we always approach the problem of healthcare in a state of ignorance. Due to that problem there is no consumer sovereignty. But, at the same time, the self-regulation of producers will be questioned, which will not be very popular with doctors. However, if the events of recent days have shown one thing it is the fact that self-regulation does not work in medicine, as was the case with financial markets. That is another reason for us to have a proper debate. Such debates will improve the National Health Service. In the mean time, we can continue to discuss the question of numbers.

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4.13 p.m.

Lord Crickhowell: My Lords, in an admirable introduction, my noble friend Lady Cumberlege referred to the start of the National Health Service in 1948. That start immediately exposed a fundamental miscalculation. Nye Bevan and his officials comprehensively under-estimated what it was going to cost. They actually expected that the cost of the service would grow less as the population became healthier. They failed to foresee that, far from declining, the demand for treatment, once freed from financial constraint, would prove literally infinite and the capacity of the medical profession and drug companies to devise expensive new treatments scarcely less. As the noble Lord, Lord Desai, indicated, since then the problem of infinite and uncontrolled demand has dogged every government. In his account of the conduct of policy under Harold Wilson and the noble Lord, Lord Callaghan, the noble Lord, Lord Donoughue, described how,

"the problems of the NHS ranged from the acute to the merely chronic".

Despite all these financial difficulties, under both Labour and Conservative administrations the services of the NHS have been expanded to a remarkable degree. Despite constant Labour propaganda that Conservative governments neglect the service, a great many of the most substantial advances have taken place while my party has been in power. If I take the period from 1979 to 1987 as an example, it is simply because I have the record of my own time in government ready to hand. Over that period expenditure on the health service grew by nearly one-third in real terms, we employed more doctors, nurses and professional staff than ever before and the NHS treated close to a quarter more patients in hospitals. We undertook the largest hospital building programme ever; and there were other important initiatives to improve the services. Early in this debate my noble friend Lord Howe gave the figures which show that those improvements continued over the next decade.

These were huge advances and yet large problems remained. They were brought home to me vividly during the frequent visits that I was paying at that time to King's College Hospital in London for treatment. Like many others, I was left several times on a trolley in a passage--yes, it even happened to Cabinet Ministers at that time--and was able to observe many things that were badly wrong with the service. A few years later, while visiting my dying mother-in-law in a mixed ward, which she hated, in Cheltenham, it was all too apparent that this was not the way to treat those who are seriously ill.

Despite the firm commitment of successive Conservative governments and our very substantial achievements, the Labour Party has succeeded in creating the myth that Conservatives are hostile to the health service, and has so sanctified the service that its worship has become almost a religion. A situation has been created where criticism is regarded as sacrilege. That is the principal reason why Conservative administrations have concentrated their efforts on

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administrative reorganisation rather than on a fundamental re-examination of the financial structure; and why such an enormous obligation now falls on the present Government. The need for reform is now clear to everyone. There is a heavy duty on new Labour to face that obligation--not with meaningless promises, but by an open examination of radical options in which the other political parties must be prepared to participate constructively.

In his memoirs Norman Fowler described how he argued the case against moving over to private health insurance and concluded that there was little to be gained from a substantial change in the financing arrangements; but he advanced the argument against the background of a "think tank" paper produced without public or ministerial consultation. He makes it clear that it was concern about "a probable political whirlwind" that was a dominant factor in Ministers' minds as they considered the issue.

My noble friend Lord Lawson of Blaby in his memoirs also advanced the case against private insurance as a primary method of NHS finance. But he acknowledges that with a system of taxpayer finance,

"when finite resources, however substantial, are faced with infinite demand, there will always be frustrated demand",

and painful consequences. Unwilling to risk the political fallout and dubious that there was an obvious solution to be discovered in the arrangements of other nations, Conservative governments have settled on attempts to reduce costs and improve efficiency by means of internal reorganisations. Important though these have been, they could not be solutions to the fundamental problem. Effective reform of health or social security systems requires open review and widespread consultation; but that was just not possible in the circumstances.

Having promised to think the unthinkable, after its election triumph New Labour was uniquely in a position to do so, but the Prime Minister funked it. It is characteristic of the Prime Minister's approach that, in opposition, he should flagrantly misrepresent the attitude of Conservatives to the health service, ruthlessly exploit the public's concern and shamelessly offer a promise swiftly to put things right, without having the smallest idea how to deliver that promise. It is equally characteristic that, a thousand or so days later when faced by the fact that things had got much worse, he should again come forward with a promise described by Anatole Kaletsky, in a cogently argued article in The Times on 20th January, as "arithmetically nonsensical"; and almost immediately half withdraw that promise. If Mr Kaletsky is even half right in his argument, it looks as if Britain will suffer from an inadequate health service for a long time to come.

In the situation that we now face, I am not convinced by the arguments accepted by colleagues in the 1980s that we should be content with internal reorganisation, and that there are few lessons to be learned from the experience of other countries. Is it not at least possible that a competitive market in the sources of finance and in the provision of services might produce real improvements?

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As Frank Field was asked to think the unthinkable, before being sacked for doing so, should we not start by debating his proposal to rebuild health expenditure around a national insurance base that would permit a new dialogue with the electorate about how much should be committed to health expenditure? Should we not relook at the possibility of more private spending on drugs, on routine visits to doctors, on accommodation, and on optional procedures? Should we not consider supplementing basic health provision with a number of approved and perhaps compulsory insurance schemes which would provide people with a choice of their level of contributory expenditure and the type and scale of service that they would then receive?

Is it not possible that people in France are getting a better service because the share of cost taken by private insurance is greater? Is there not room for much greater contracting out of services to improve efficiency and cost competitiveness? The National Health Service is lagging far behind private business and local government in contracting out services. Right back in the early 80s my noble friend Lord Roberts of Conwy and I achieved dramatic improvements in the efficiency of the renal dialysis service in Wales by contracting out the service delivered inside a number of National Health hospitals in Wales.

The time has come to accept that what we have is not sacred, perfect or even the best; and that this is the moment for an open and radical review of the options. If the Government tackle the problem in that way, they are entitled to expect a full and constructive contribution from the Opposition. I only wish that I had more confidence that the Prime Minister had the understanding and courage to follow that course.

4.22 p.m.

Baroness Sharp of Guildford: My Lords, I join others in thanking the noble Baroness, Lady Cumberlege, for initiating this extremely important debate.

Just over a year ago, I made my first major speech in this House on the Second Reading of last year's Health Bill, as it then was. In that speech I drew your Lordships' attention to the conundrum facing the health authority in the part of the world I come from; namely, Guildford in west Surrey. As I put it then, in terms of population we are one of the healthiest and wealthiest health authorities in the United Kingdom. Because we are healthy and wealthy our needs are judged by the NHS, quite rightly, to be low. But, because we are wealthy, our expectations and aspirations as to the level and quality of service that we should receive are high.

There is, therefore, an unbridgeable gap between the resources supplied and the resources demanded--a gap which currently measures some £10 million on a budget of some £370 million, and has been as high as £20 million, leaving a millstone of debt to be repaid as well as finding economies needed to close that gap. Every service has, of course, seen its share of the cuts:

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the community and mental health services, the ambulance service, the acute services and district nurses. Now, in spite of a clear lack of capacity in the three accident and emergency departments that serve the area, it is rumoured that one will be closed down. The Government are unyielding. The massed ranks of Surrey's Conservative Members of Parliament orchestrated an Adjournment debate two weeks ago in the other place. They pleaded with the Minister to forgo the repayment of the £18 million debt that is hanging round our necks. The Minister firmly told the assembled Members that the £18 million has to be repaid because this Government are interested in a sustainable and long-term investment.

As a Liberal Democrat the cynical thought crosses my mind that, of course, the Government have no seats to lose in Surrey. What does it matter? Why worry? I worry because it seems so crazy. We have a modern, new district hospital and wards that are kept closed, yet we are short of beds. We have a refurbished accident and emergency department, on which £2.5 million has just been spent, which provides a 13-bed observation ward. Therefore, although last Monday one 71 year-old had been waiting for 40 hours for a bed, at least he was not waiting on a trolley in a corridor. However, it now appears as if we do not have enough money to keep that observation ward open. Staffing is a constant problem. Seven of the nurses in the accident and emergency department have resigned; and it is not just a question of pay. They resign due to the constant pressure of work and the need to put in extra shifts to keep the department open, knowing that they cannot, in the accident and emergency department, provide the nursing care that is required. Resignation is the most potent form of protest that they can make.

Therefore, the hospital will have to hire more agency nurses, placing a greater load of responsibility on the remaining staff nurses. That will add further to the budget problems. But why should the agency nurses, who are paid far more than the ordinary staff nurses and can pick and choose their hours, avoid all these heavy responsibilities? It is no wonder that NHS-trained nurses leave the NHS for agencies. I believe that today there are 2,500 fewer nurses working for the NHS than there were in May 1997 when the Government came to power. In Guildford we have just had our vacancy rate cut from 15 to 10 per cent. Why is that? It is because we have recruited a team of nurses from the Philippines.

Of course we need to spend more on the National Health Service. Many noble Lords have mentioned the amounts that are spent. Our expenditure per capita on health in this country is half that of Germany or France, and lower even than that of Spain. If we consider the matter in terms of absolute amounts spent per capita, we join Greece and Portugal at the bottom of the league table in Europe. Yet we pride ourselves--listen to what the Prime Minister said at Davos--on the strength and vibrant growth of our economy. In these circumstances, it is crazy for the Government to cut taxes ahead of providing more resources for the

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National Health Service, as we Liberal Democrats have said time and time again. Every opinion poll says the same thing. People are willing to pay more tax, provided they know that it is going to the National Health Service. But somehow we have to ring-fence that money.

The noble Baroness, Lady Cumberlege, spoke of having a tax that was hypothecated towards the National Health Service. Others have mentioned national insurance. I should like to see us impose a 2 per cent surcharge on national insurance, and to ring-fence that for the National Health Service. That would make a reality of many people's illusion that part of their national insurance payment goes to health.

However, money is not everything. Many noble Lords may have read the article in the Economist a couple of weeks ago which pointed out that Britain has fewer doctors per thousand of the population than any of the other G7 countries. Italy, which spends only a little more per capita than the UK, has three times as many doctors as the UK per thousand of the population. Germany and France have twice as many doctors per thousand of the population as the UK. This is not accounted for in terms of the difference in the proportion of GNP spent on health. France and Germany have twice as many nurses as the UK. Yet these are high income countries where salaries cost a great deal.

On the other hand, the noble Lord, Lord Desai, mentioned our efficiency in this area. We are incredibly efficient if one considers the number of operations performed; the number of patients seen by doctors in surgeries; and the number of day operations performed. We are top of all the league tables in those respects. However, are we in danger of confusing quantity with quality? Why am I, a British woman in my early 60s, more likely to die if I have a heart attack here in Britain than if I have one in France? Why are our survival rates from cancer so poor? Why is my husband, who has a totally untroubling and slight hernia, being taken into day surgery next week when there are urgent cancer operations which have had to be postponed for week after week after week?

I believe that we have become transfixed by quantitative indicators and that we have lost sight of the qualitative. It is cheaper in the long run to pay nurses decent salaries, to train them and to keep them in teams in our hospitals than to continue down the present route of outsourcing nursing services. It is cheaper to recruit more doctors than to lose so many to the present very high levels of stress and early retirement. If we could measure the quality of life, we should see that it is infinitely cheaper to provide a new hip quickly now than to allow people to suffer the pain, the inconvenience and the costs of waiting two or three years for an operation.

We need to rethink where the health service is going. The Government's record is not brilliant. I believe that they inherited a very flawed system, which has been made unnecessarily difficult by their acceptance of the budget set by the Conservatives. I applaud some of the

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initiatives that have been taken--NHS Direct, for example--but the Government have failed to do with the health service what they failed to do in education: to rethink the ethos of the public service.

I join the noble Baroness, Lady Cumberlege, in suggesting that we need to look forward and that we should explore different initiatives.